Corruption: A Theoretical perspective and Relevance for Economic Growth

The history of corruption goes back to ancient times. Its nature can be extremely diverse and thus the context and relevance of the problem varied widely between countries and time periods. The problem has become more focussed in recent decades with increase in global cooperation for achieving economic and social growth in all countries since 1960s. The paper argues that theoretically it is impossible to have a corruption-free society or economy. Corruption has its roots in market imperfection of any form. As perfectly competitive market doesn’t exist in reality every market in every country has the potentiality to generate corruption. Although it is possible to have a strong prudential system to keep the situation under control, it doesn’t work in most of the economies due to conflicts of interests. In developing economies, once policy-initiated corruption starts it often generates its own force and becomes a dominant factor over political, economic and social interests